NDIC struggles to recover loans as debtors dodge repayment obligations

The Nigeria Deposit Insurance Corporation has flagged serious challenges in retrieving money lent by failed banks, with borrowers employing tactics to evade repayment and stall the recovery process. Speaking at a stakeholders' forum on Monday, Ogungbemi Theophilus, head of the NDIC's Asset Management Department, outlined how debtors are deliberately obstructing collection efforts through concealment of assets, prolonged legal proceedings, and intimidation.

These evasion strategies are compounding difficulties already facing the NDIC in its liquidation work. The agency has separately identified that assets held by failed banks are being valued at inflated prices, making it harder to find buyers and convert property holdings into usable funds.

This combination of inflated asset pricing and borrower non-cooperation is stretching out the time needed to settle claims owed to depositors who held accounts above the insurance limit. The NDIC has also raised alarm over unethical practices in how bank assets are being disposed of, alongside suggestions of possible coordination among service providers handling the sale process.

These procedural and ethical concerns add another layer of complexity to an already difficult recovery landscape. The agency noted that prolonged liquidation processes directly translate into delayed payments reaching customers of the defunct institutions.

To date, the NDIC has conducted asset auctions as part of its recovery efforts, though sources did not provide specific details on the volume or success rate of these sales. Theophilus's public statement at the stakeholders' seminar represents an attempt by the agency to draw attention to systematic impediments blocking fund recovery operations across multiple fronts.